The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Wednesday, President Bush ended five years of economic sanctions against South Africa. He also accepted a proposal to close 34 U.S. military bases. We'll have details in our News Summary in a moment. Judy Woodruff's in Washington tonight. Judy.

MS. WOODRUFF: On the NewsHour tonight, the President's South Africa announcement is our lead focus. Roger Mudd reports on what Mr. Bush said and we have South African and American reaction to it. We'll also take a look at one big drawback to scientists' efforts to identify faulty human genes, the chance that insurance companies may deny medical coverage. NEWS SUMMARY

MR. MacNeil: South Africa's five years of economic isolation by the United States ended today. President Bush announced the lifting of sanctions after verifying that South Africa had met the criteria set by Congress. He said South Africa had undergone a profound transformation in turning away from its racial apartheid policy. Black leader Nelson Mandela told President Bush in a phone conversation that the move was premature. In this country House Speaker Tom Foley said political rights had not yet been achieved in South Africa and he said he wasn't satisfied that all political prisoners had been released. Mr. Bush made the announcement at a White House news conference.

PRES. BUSH: This is a moment in history which may believed would never be attained but we've done so through the efforts of many people in South Africa and around the world. And in that sense, this is a time for reflection and it's also a time when all who care about the future of South Africa as I do should re-dedicate themselves to stay the course in the interest of peace and democracy. There has been dramatic change. The law says when the five conditions are met, the sanctions will come off and signed that today, but all is not totally well there and we will continue to be actively involved, as actively involved as we can be.

MR. MacNeil: We'll have more on u sanctions story after the News Summary. Also today South Africa's ambassador to the United States, Harry Schwartz, went to the State Department. He met with Richard Kennedy, the department's adviser on nonproliferation and nuclear energy and presented a document formally agreeing to the terms of the nuclear nonproliferation treaty. It commits South Africa to a policy of not acquiring nuclear weapons. Judy.

MS. WOODRUFF: At today's news conference President Bush responded to criticism of his nomination of Clarence Thomas to the Supreme Court. In particular, the President responded to Senate Majority Leader George Mitchell's comment that Mr. Bush opposed quotas except in the nomination of Supreme Court Justices.

PRES. BUSH: In my view this isn't a quota appointment. I said up there in Maine and I still feel that. I feel more strongly than ever, that it is the right thing at the right time, to use an expression that Lyndon, himself, used, and so, you know, we're taking on some water on this, a little few shots, but I have an innate confidence that this man will be confirmed, and the reason he will be is that he deserves to be confirmed.

REPORTER: Can you really say that his race had nothing to do with it?

PRES. BUSH: Well, I think I indicated up in Maine that so much the better, but I'm not going to say it's a quota opponent. I don't believe that one seat should be assigned to one group of any kind.

MS. WOODRUFF: The President also stood up for his nominee to head the CIA, Robert Gates. He said he had no doubts about Gates, despite new revelations that senior CIA officials knew of the Iran- Contra scandal months before it became public, in November 1986. Those revelations came from former CIA official, Allan Fiers, who yesterday pled guilty to misleading Congress. Fiers did not directly implicate Gates. He was CIA deputy director at the time. On the question of Iraq, the President said he is skeptical of its nuclear program disclosure. He said he believes Saddam Hussein has yet to reveal his country's full weapons potential. He also said the U.S. would never have normal relations with Iraq as long as Saddam Hussein is in power. He again urged the Iraqi army to topple him.

MR. MacNeil: The President today endorsed an independent panel's recommendations to close 34 military installations as a cost cutting measure. Mr. Bush said the report had his total acceptance. He signed it and sent it on to Congress, which has 45 legislative days to either accept or reject the entire list. President Bush also reappointed Alan Greenspan to a second four year term as chairman of the Federal Reserve Board. His current term expires next month. Mr. Bush made the announcement late this afternoon. He said Greenspan had done an extraordinary job as head of the Central Bank.

MS. WOODRUFF: In Moscow today, Boris Yeltsin was sworn in as the Russian republic's first popularly elected President. Tim Ewert of Independent Television News reports from Moscow.

MR. EWERT: Boris Yeltsin returned to the Kremlin today to the strains of a 19th century opera called "A Life for the Czar." He was the first Russian leader since Czar Nikolas II to be blessed by the patriarch of the orthodox church and took the oath as the first to be democratically elected in the country's thousand year history. In a ceremony which for many marked the end of Communist power in the Russian republic, Mr. Yeltsin, who quit the party last year, declared "Great Russia is rising from its knees." Mikhail Gorbachev was there too. Four months ago, he told the Russian people they didn't need an elected President. Today he promised his support. Mr. Yeltsin recently told Mr. Gorbachev to resign. Today he's talking of supporting him in elections for a Soviet President -- old enemies, new friends, outwardly at least. The alliance may prove fragile. The man being hailed as the new Russian czar has made it clear he'll withdraw his support if Mr. Gorbachev doesn't keep up in the scramble for reform.

MS. WOODRUFF: Back in this country, President Bush's policy on China suffered a defeat in the House of Representatives today. It voted 223 to 204 to reject his renewal of Most Favored Nation trade status for China. Both the House and the Senate have legislation pending that requires China to demonstrate improvement in human rights practices before any trade concessions are granted. That's it for our summary of the day's news. Just ahead, lifting South African sanctions, reaction there and here, and one problem with revealing who's carrying faulty genes. FOCUS - LIFTING SANCTIONS

MR. MacNeil: We devote the bulk of our program tonight to President Bush's decision to ends sanctions against South Africa. With South Africans and Americans involved in investment decisions, we'll examine what the decision might mean for white and black South Africans now that the legal pillars of apartheid are falling. We begin where today's story began with the announcement at the White House that South Africa had met the five conditions set up by Congress when it imposed sanctions in 1986. Roger Mudd reports.

MR. MUDD: The President's decision was a surprise to virtually no one. The White House had been promising for several weeks that it would be done. So when Mr. Bush appeared before the press this afternoon, reporters knew why.

PRES. BUSH: We've seen a profound transformation in the situation in South Africa. Since coming to office in 1989, President DeKlerk has repealed the legislative pillars of apartheid and opened up the political arena to prepare the way for constitutional negotiations. And as I've said on several occasions, I really firmly believe that this progress is irreversible. Much remains to be done -- let's be very clear on that point -- but I've been impressed with the commitment by President DeKlerk, by Nelson Mandela, by Chief Buthelezi, and many others to continue to build a constitutional democracy in South Africa, and we will use all available means to encourage this process through to its successful conclusion. And I have today just signed and issued an executive order terminating the sanctions against South Africa, and in doing so based on a recommendation from Sec. Baker, I have determined that the South African government has met all five of the conditions for theses sanctions to end as set forth very clearly in the act.

MR. MUDD: The five conditions laid down by the Congress in 1986 were: [1] the South African government must release all political prisoners; [2] the state of emergency must be repealed; [3] political parties must be legalized and all races free to participate in the political process; [4] apartheid laws must be repealed; and [5] the white government must agree to enter good faith negotiations with the blacks for a non-racial government.

PRES. BUSH: The peaceful transition to the new South Africa will not occur in a vacuum. South Africa must achieve full economic health through a strong rate of growth if it is to meet the expectations of all South Africans for a better life. And the end of sanctions on trade and investment will encourage this process. And we hope that state and local governments and private institutions in the United States will take note of our action and act accordingly to help build a new South Africa, to help build employment opportunity in South Africa.

TOM RAUM, Associated Press: Mr. President, do you have any concerns or reservations in moving now to remove the sanctions, that you might actually have the effect of undermining some of the progress that's been made, rather than --

PRES. BUSH: Well, I think I had no flexibility in considering that but my view is we will not be undermining the progress. At some times one wants to recognize the changes, the very constructive changes that have taken place, and then see what the next step is. And in my view, the mandate by Congress is a proper one, and I think now that our role should be encouraging consultation between the parties, all of them, between Buthelezi, Mandela, DeKlerk, to see that the progress made can be built on, so I don't -- I don't have any thoughts like that at all.

MR. RAUM: May I follow up?

PRES. BUSH: Yeah.

MR. RAUM: What do you say to groups like the NAACP and Amnesty International and even House Speaker Tom Foley that all the five conditions have not been met and there, in fact, still political prisoners in South Africa?

PRES. BUSH: In terms of how I respond to critics on this, I say, look, one, we're complying with the law you people wrote, and secondly, I happen to think it's the right thing to do. I believe that this will result in more progress towards racial equity, instead of less, and certainly in more economic opportunity rather than less, so the time has come to do it.

MR. MUDD: on Capitol Hill, political reaction today seemed not to carry much sting. The House of Representatives had girded itself for an avalanche of speeches, but only a handful of members mentioned it.

REP. TOBY ROTH, [R] Wisconsin: I applaud the President's decision. South Africa has embarked on a new era of racial harmony and peace and it's time for America to help the new South African leadership restore its economy and once again become a strong ally.

REP. JOSEPH KENNEDY, [D] Massachusetts: The President is bending over backwards to accommodate South Africa's government, but he's not doing the same for South Africa's people. The conditions to lift sanctions have simply not yet been met in letter or in spirit. Sanctions are not supposed to be lifted until all South Africans can participate in the political process. Yet, 80 percent of the people still cannot vote simply because of the color of their skin.

MR. MUDD: The sharpest response came from members of the Congressional Black Caucus like Democrat John Conyers of Michigan, who had helped override Ronald Reagan's veto of the sanctions bill five years ago.

REP. JOHN CONYERS, [D] Michigan: Very few people could impartially examine the circumstances of South Africa at this moment and say that there has been substantial progress towards dismantling the system of apartheid and that they are now moving toward a non-racial democracy.

MR. MUDD: Randall Robinson of the Trans-Africa Lobby, which had played a key role in passing the sanctions act, was outraged.

RANDALL ROBINSON, Trans-Africa: Today for 28 million black South Africans is a tragic day inasmuch as they today have been abandoned in their quest for freedom by the United States government. Indeed, it is as well a sad day for American democracy, for by lifting American sanctions against South Africa, President Bush has cynically violated both the spirit and importantly, the letter of American law.

MR. MUDD: Republican Sen. Richard Lugar of Indiana who voted for sanctions five years ago said today lifting them is not the end all or the be all.

SEN. RICHARD LUGAR, [R] Indiana: The law of 1986 stipulated precisely what needed to be done and likewise, the objectives of United States foreign policy at that time, the compromise forged in the Congress, was not to the liking of all members. Some would like to have proceeded to many more stipulations, many more objectives, but the compromise was the law, law has been met, and our credibility as a foreign policy state was at stake.

MR. MUDD: Leaving the State Department, South Africa's ambassador to Washington, Harry Schwarz, an anti-apartheid diplomat, was obviously pleased.

HARRY SCHWARZ, Ambassador, South Africa: I mean, the overall impact is that there obviously will be a restoration of a degree of confidence in the country. President DeKlerk will be able to deal with the right wing in the white community much easier and we hope that it'll have some effect on the unemployment so that more of our people who are unemployed can be put into work. I think that's the positive effect of it. There's no question that we're going to stop the movement towards reform. On the contrary, I think this is the incentive to move ahead and to go ahead and to move towards a democratic government in South Africa.

MS. WOODRUFF: We get more now on the effect of the U.S. decision on South Africa's economy and politics. The first reaction was on the South African Stock Exchange. We have a report from Judith Aslet of Independent Television News.

MS. ASLET: Even before President Bush had formally announced the lifting of sanctions, shares at the Johannesburg Stock Exchange had already reached an all time high. Traders confirmed it was one of their busiest days this decade with the promise of new investment from the United States, giving the economy here a much needed boost.

TONY NORTON, Johannesburg Stock Exchange: It really means that the world economy and financially is reopened to South Africa. The biggest economy in the world, the harshest critic of South Africa, the one that really hurt with its sanctions has brought us back and that will have huge implications in terms of confidence within the country and outside the country.

MS. ASLET: Political reaction to the news was also swift, with foreign minister Pik Botha welcoming the move as the dawning of a new era for South Africa.

PIK BOTHA, South African Foreign Minister: We now hope, as President DeKlerk, that this momentous decision will lead all over the world universally to the termination of sanctions, particularly by those countries and governments who indicated either privately or publicly that they were waiting for the United States' lead in doing so.

MS. ASLET: The United States imposed trade sanctions and the ban on new investments in South Africa five years ago. Since then, many big names like Coca Cola, IBM, and General Motors have all pulled out. The effect on the economy has been a rise in unemployment, with an estimated 7 million, mainly black people, without work. The lack of foreign investment has also stopped the economy from growing, forcing South Africa into an almost constant state of recession.

DUNCAN INNES, Financial Consultant: The one form of sanctions which has had the most serious effect on us has been the denial of access to international credit. We have always relied on credit, international credit, for our economy to grow beyond the phase where we run into a balance of payments deficit. What's happened in each growth spurt is as soon as we hit the balance of trade deficit, we don't have access to international credit so we go back into recession.

MS. ASLET: The effect of sanctions on a political level has always been less clear cut, with the government denying international pressure had anything to do with its current reform program, including beginning talks of the South African National Congress. But the ANC says sanctions have played a vital role, a position also held by many independent observers.

DUNCAN INNES: Sanctions played a very important part in encouraging DeKlerk to initiate the reforms he did. They were not the only factor, but if you see the way his reform program has moved in terms of getting, repealing particular pieces of legislation which were required of him to get sanctions lifted, you can see the impact they've made on his thinking.

MS. ASLET: The question now is whether the international community is jumping the gun by lifting sanctions before many of President DeKlerk's reforms have taken effect. Douglas Hurd today visiting young cricketers in the township of Alexandria near Johannesburg warmly welcomed the United States move, as well as adding his support to the lifting of the international ban on cricket. But despite the abolition of apartheid legislation, the African National Congress argues the inequalities in South African society, the practical effects of apartheid, are as prevalent now as ever. And the organization is calling on the international community to maintain sanctions until a new constitution is in place.

MS. WOODRUFF: And now we get two more South African views on the lifting of sanctions and how it impacts the daily lives of people within that country. Dumisani Kumalo is a project director for the American Committee on Africa, an interest group based in New York. He has campaigned for the maintenance of sanctions by the U.S. at the state and local levels the past 10 years. Michael Christie is the director of the South Africa Foundation in Washington. For the last four years he has presented and anti- sanctions voice on behalf of South African business. Mr. Kumalo, you think the President has made a mistake. Why?

MR. KUMALO: Well, he made a mistake because black people in South Africa cannot vote, certainly not all the conditions have beenmet. Yes, there has been progress, but it doesn't mean that the progress that has taken place is irreversible. And more important, you know, the Anti-Apartheid Act stated purpose by saying this should also end apartheid and lead to a creation of a non-racial government. That cannot happen if the majority of the people don't have the vote.

MS. WOODRUFF: Why not?

MR. KUMALO: Because we cannot vote. I mean, the strange thing is that the United States could turn its back on South Africa when we are still denied the right to vote.

MS. WOODRUFF: But you heard President Bush say today -- he said there'd been a profound transformation. He said all is not totally well but we're going to continue to be active, we're going to continue to stay involved, he said.

MR. KUMALO: Well, President Bush is absolutely wrong. You know, the Population Registration Act as an example was repealed, but it only applies to children born since February 1990. It means the rest of 35 million South Africans remain classified by race. This afternoon we got a fax from the Human Rights Council and the African National Congress naming 800 political prisoners in jail. These are people who are convicted in political trials under a political stage. They were not charges of theft or murder or rape or any of the other, and the many criminal stages.

MS. WOODRUFF: Mr. Christie, what about this? I mean, you hear the argument that Mr. Kumalo and other critics are making that the President has moved prematurely.

MR. CHRISTIE: I'd like to start within a point of agreement with Mr. Kumalo that the central purpose of the transformation in South Africa is to achieve a society in which all people vote. What has to be understood is that this has been agreed upon. The principle of that is no longer a matter for contention in South Africa. What remains is to find the mechanism, in other words, a constitution, through which people are going to be able to exercise that vote, and that is the process that we're going to forward from here, rather in the way that the United States had to have a continental congress before it arranged an appropriate mechanism through which people voted. In other words, one man, one vote has to find the structure.

MS. WOODRUFF: But Mr. Kumalo's point, as I know you heard, is that we cannot -- as long as the pressure is no longer there, we can no longer count on the South African government to make these changes.

MR. CHRISTIE: The apartheid has collapsed. It's collapsed because black South Africa walked all over the structures of apartheid. The past laws have collapsed. The group areas have collapsed. It's a tremendous achievement on the part of black South Africa. And Mr. DeKlerk, in fact, can't undo that and the greatest, at prison the greatest barrier to going ahead and finding a constitution that's going to be appropriate to unravel the mess of apartheid, is, in fact, the violence and the dissent that's taking place in South Africa. And I think is the connection with what happened today. We have an economy that is in a very, very serious and protracted slump. We have an unemployment rate in excess of 40 percent. This breeds violence, competition for jobs, this sort of thing. In other words --

MS. WOODRUFF: So how are you -- let me interrupt -- and how are you suggesting that lifting the sanctions is going to make a difference in the economic picture?

MR. CHRISTIE: In the economic picture, the most significant fact of the South African economy in the last 10 years is that South African businessmen, themselves, have begun or began in the 1980s to invest less than they did previously. They lacked confidence and over 90 percent traditionally in South Africa of all investment has come domestically. So South Africa at the moment the impact within South Africa is that South Africa's businessmen will get confidence that we're reentering the world economy.

MS. WOODRUFF: So lifting sanctions will improve their own confidence and that will lead to less violence, less tension, which will lead then, you're saying --

MR. CHRISTIE: It leads to a lowering of the unemployment rate. Let me give you --

MS. WOODRUFF: Let me just give, if you don't mind, Mr. Kumalo a chance to respond to that. What about that?

MR. KUMALO: Well, you know, the problem in South Africa is not just the absence of jobs. It's the absence of justice. And, you know, slavery was a full employment opportunity, the slaves worked, and you know, if we turn around and say we have to give people jobs, I'm saying that we are 35 million South Africans, of all races we should all be South African citizens which we're not, we should all be able to vote, which we're not. Mr. DeKlerk might be a very nice white man, but he was only elected by 15 percent of the population, the whites.

MS. WOODRUFF: But what about Mr. Christie's point that lifting the sanctions is going to increase the confidence of South African business people as well as international business people and this is going to have the effect of improving the economy which will have the effect eventually of opening it up for more political reform?

MR. KUMALO: For 35 years, you know, without sanctions their confidence was right up to continue apartheid business as usual. We are not -- if we are to build confidence, we have to build the confidence of 80 percent of the population that they can be true South African citizens. We don't have to build the confidence of white people who have oppressed us. I mean, it's unfair.

MS. WOODRUFF: Mr. Christie.

MR. CHRISTIE: Well, we're not going to get past the state of dissension and unrest in South Africa while 7 million people haven't got jobs and I think what South Africa has suffered from enormously in the past is that it has been politicized. Every decision has been a political one. This was apartheid. This was the nature of apartheid, the utter and total domination of politics, and from here we've got to get the economic recovery can't wait for the political settlement to be finalized in every respect. For a change we've got to make economic progress and political progress together.

MS. WOODRUFF: What about that, Mr. Kumalo?

MR. KUMALO: Well, I mean, obviously, I'm terribly disappointed about what happened today but really to say that we just have to get those black people jobs, while the whites exercise the vote, while they are the citizens is ridiculous. We may live by work, but, you know, it doesn't mean that we are not citizens of South Africa.

MR. CHRISTIE: I think the point here, Judy, is that whites won't be voting, there will not be another election that is a white election. So, in other words, the vote is not going to be -- it's irrelevant -- the next vote is going to be a vote for all South Africans. And we've got to remove the barriers to that. We've got to find the kind of economy and the kind of society in which we're going to be able to have a democratic --

MR. KUMALO: The people who have benefited because of Mr. Bush's lifting of sanctions, you notice they are white South Africans. Not one black South African is going to walk out of his house in Soweto tomorrow and get a job, but the South African government will be able to raise credit and raise money and, you know, so this decision benefits the white South African completely, and I'm just saying that is not fair.

MS. WOODRUFF: All right, gentlemen, stay with us. Robin.

MR. MacNeil: Now what will today's announcement mean for American business in South Africa? According to the Commerce Department, direct U.S. investment in South Africa peaked in 1981 at $2.6 billion. By 1990, that was down to $714 million. Since 1984, 214 U.S. companies have pulled their direct investment out of South Africa, while 104 have remained. Those figures come from the Investor Responsibility Research Center, a group that watches investment in South Africa. And there's another wrinkle. Today the man who spearheaded the drive for U.S. disinvestment in South Africa, the Rev. Leon Sullivan, said he would ask cities and states to maintain sanctions in spite of the change at the federal level. With us to discuss these issues are William Archey, the International Vice President of the U.S. Chamber of Commerce, and New York City Comptroller Elizabeth Holtzman. Mr. Archey, what difference will lifting the federal sanctions in Washington make to American companies? Will they rush back in now?

MR. ARCHEY: I don't think so. I think that this is not going -- you're not going to see an immediate rush of U.S. companies back in for a number of reasons. No. 1, what was just alluded to, there still remains at least 150 cities, counties, and states that will have restrictions on doing business in South Africa or if they want to do business give up doing business with those cities or localities. The second one has to do with the fact that the political instability in South Africa remains a considerable deterrent for companies, not just U.S. but Western companies, in that the predictability, if you will, is not going to be there, and then there's a third element. In 1986, when the sanctions went into place, U.S. companies did not have opportunities for investment in Eastern Europe, opportunities for investment in Latin America going where major economic reforms were proceeding and political reforms, so I think there's going to be a real caution on the part of U.S. companies before they rush back into South Africa.

MR. MacNeil: And you speak as somebody, I gather, who thinks it's a good idea to lift the sanctions?

MR. ARCHEY: Oh, absolutely. I think that your numbers show it certainly has had some impact but I think that one of the things, there's an interesting conundrum here, it's my view that the political reform process in South Africa, as we have discovered in Eastern Europe, is going to be very much dependent upon how well economic reform proceeds. And economic reform for that to proceed well is going to at least in part be dependent upon the ability of South Africa to attract foreign investment.

MR. MacNeil: Okay. Let's turn to the question of the city and state restrictions and laws which remain. Elizabeth Holtzman, you're the Comptroller of New York City. You sit on the board of one of the largest pension funds in the country, with about $40 billion in assets, and you're also aware of the laws that New York has which -- just describe what restrictions or what ways of dissuading American companies from doing business with South Africa the New York laws impose.

MS. HOLTZMAN: Well, you can't do business with New York City. The city won't contract with you if you as a company do business with South Africa. Secondly, two of the city's largest pension funds - - there are actually five pension funds in all -- are virtually completely South Africa free. So we won't invest in -- these two funds will not invest in South Africa or into companies South Africa, companies that do business with South Africa.

MR. MacNeil: And the doing business with companies that do business includes banks, does it not?

MS. HOLTZMAN: It does. It includes -- it can include banks. It can include automobile companies. It can include paper makers. It can include companies that sell erasers.

MR. MacNeil: So when the South African observer, analyst said earlier that one of the chief problems they've had is getting credit to come to one of the largest capital markets in the world in New York City, they will not be able to borrow from banks in New York City if those banks want to do business with the city.

MS. HOLTZMAN: Well, that will be partly the case. In addition to that, of course, some of the companies that do underwritings are also affected because we've been deeply concerned about what our underwriters are doing in terms of dealing with South Africa, whether it's underwriting South African stocks or dealing in South African investments.

MR. MacNeil: Now is New York likely to change these restrictions?

MS. HOLTZMAN: I don't think so. I would be very surprised that New York City would change anything until we see real democracy in South Africa, one person, one vote, the right of the black majority to determine its destiny and its future, real justice and real freedom in South Africa.

MR. MacNeil: Now do you just speak as an individual, or do you have some --

MS. HOLTZMAN: Well, it's just my political sense of what's likely to happen. I think that although I'm only one of five trustees on the pension funds, I've heard no indication from anybody that they want to see any change and I haven't heard the mayor of New York City say that he would support change either in the sanctions laws.

MR. MacNeil: Mr. Archey, if a city as big and influential in these areas as New York is typical of other cities, what kind of a curb is that going to put, continue to put on American businesses doing business?

MR. ARCHEY: Well, you've alluded to some aspects in the financial area. For companies that deal with large cities and local jurisdictions who sell office products, school products, things like that, it remains a considerable disincentive and it's one that I think you noted in your earlier piece, you saw the President, in fact, encourage state and local governments to proceed along the same lines as has the President and as has the federal level. That's something that we would also encourage. If you're a company that is not selling to a local jurisdiction and you're in large industrial products and things like that, then the local curbs will have no real impact, but they do have a very substantial on a number of companies and I think that there's going to be some companies that may want to contest that in court.

MR. MacNeil: What do you think of Ms. Holtzman's position that she thinks it's likely, here political sense tells us that New York City won't move until there is full democracy in South Africa?

MR. ARCHEY: Well, I'm not an expert on the political ins and outs of New York City. I think that what I think is going to begin to develop here in the United States, as well as in other countries, is the realization that the economic reform program in South Africa is going to be greatly dependent upon the ability of foreign companies to do business and to make investment. I would also note one other thing that hasn't been said anywhere during the program tonight. The United States was the last of the major powers to, in fact, revoke its sanctions. The EC, the European Community, did it a few weeks ago. And for all practical purposes, all of the major Western countries, as well as now Japan, have agreed to begin to do or to conduct normal business transactions with South Africa.

MR. MacNeil: Yeah. Ms. Holtzman, do you think that the pro- sanctions anti-apartheid movement outside Washington still has more clout than it has in Washington and that the attitude that you've expressed will continue to obtain for some time, that they will, the cities will listen to Leon Sullivan when he says, keep your sanctions in place?

MS. HOLTZMAN: Well, I think this is a President, first of all, who never was enthusiastic about sanctions to begin with, and I think at the first opportunity is moving to lift them, and I think clearly prematurely and I think an unjustifiable way. I think cities with traditionally more progressive, more liberal, with large minority populations, they, people in cities will tend to understand the consequences of a lack of justice and a lack of democracy in South Africa. I would tend to believe that we will not see much movement to end sanctions policies and divestiture policies, that cities will, and other localities, will continue to be strong and firm about the need to maintain stiff pressure on South Africa until we see true reform, true democracy.

MR. MacNeil: Well, thank you. Judy.

MS. WOODRUFF: Mr. Christie, let me come back to you. We heard Mr. Archey say on two occasions now that getting economic, achieving economic reform in South Africa is going to depend to a great degree on attracting foreign investment. Do you agree with that?

MR. CHRISTIE: I think it's very important. I don't think it's more important than the psychological impact that the lifting of sanctions will have on South African investors, themselves, in other words, to get the economy going among those who are on the spot, but it is very important -- and I think that this -- my response to a point raised by Mr. Kumalo that white South Africans are going to benefit -- you know, this is simple, if I may put it, the continuation of --

MS. WOODRUFF: This is a point Mr. Kumalo made earlier.

MR. CHRISTIE: Yes. Political grandstanding here in the sense that black people are currently killing themselves in South Africa, each other, arising out of the conditions that come out of a country that has a 40 percent unemployment -- the worst unemployment rate ever achieved in this century was at the depth of the depression in 1933 where the unemployment rate reached 24.9 percent -- and this country, this unified country, showed signs of coming apart. We're undergoing a fundamental political transformation and at the same time having to sustain a 40 percent unemployment rate. Frankly, we've got to attack both problems at the same time. We've got to arrange a constitution whereby the vote that has been suspended for white people as well as black people, we are not going to vote until we have a one man, one vote election, that has been suspended on both sides, and we've got to get the economy going ahead and we've got constitutional talks going ahead together.

MS. WOODRUFF: Well, that's the point of course that we got to a moment ago, but do you have anything -- Mr. Kumalo, I assume you're not going to change your mind on that score this evening.

MR. KUMALO: Perhaps if Mr. Christie is worried about black people killing each other, his foundation could encourage Mr. DeKlerk to enforce the law. The reason of the violence, it's been documented that it's because of security forces, police forces encouraging it. So, you know, it's not like black people woke up one morning and decided to kill each other.

MS. WOODRUFF: All right. I have a feeling we're not going to resolve your differences on that tonight, but I do want to get back to the point that Mr. Archey made earlier and that I was just asking you, this notion that it depends greatly, largely, on foreign investment. You're saying it's important but you think more important is the confidence of South African investors, themselves. Mr. Archey, let me come back to you. How do you see that balance between what South African business people do and the relative importance of outside investment?

MR. ARCHEY: I think it's going to have to be both and I think what Michael was saying earlier about the fact that 90 percent of all investment in Africa came from local people, I would argue that that may not be adequate for the demands and challenges of the 1990s. There are many more people, many more people entering into the work force -- the need for foreign technology which was stopped, not just capital flows, all kinds of things that I think are going to be required in order for that economy to be able to accommodate the number of entering people into the work force.

MS. WOODRUFF: All right. If that's the case, what difference is lifting these sanctions going to make? You're saying, you were just saying a moment ago the foreign investment may not be there. We're hearing Ms. Holtzman present the argument for why many states and localities of the United States are not going to be lifting sanctions.

MR. ARCHEY: Well, I am saying I don't agree with Ms. Holtzman at all about that. I think there's going to be a number of states and localities that are, in fact, going to follow the federal lead, and are, in fact, going to remove and rescind some of those sanctions. I also am saying that the question that was asked of me by Robin was, is there going to be an immediate going back to South Africa? I don't think that's likely. I don't think that's likely at all. But over the long-term I think it is going to increase. I think two way trade will increase and I think --

MS. WOODRUFF: Over the long-term. How many years are we talking about?

MR. ARCHEY: I think over the next five to ten years, but I'm saying in the next few months are we going to see all the companies, the 200 plus companies that withdrew from Africa go back in, no, I don't think that's going to happen.

MS. WOODRUFF: Well, in the next five to ten years, Mr. Kumalo, is that going to make a difference?

MR. KUMALO: Well, as someone who worked at state level to see these bills being passed, I'll just quickly say that these laws were passed in spite of a Bush-Reagan administration. These laws were passed before the CAAA. They are going to be there after the CAAA because they were passed when even the companies took us to court and said states could not make foreign policy. So you know, we talk about the comfort of the investor, what about the comfort of the indigenous African people who can't vote in their country, who can't be citizens in their country?

MS. WOODRUFF: But what about Mr. Archey's specific point that in five to ten years down the road you will begin to see reinvestment in a big way, is that going to make a difference for the average black citizen in South Africa?

MR. KUMALO: It will not, because five, ten years, whites will still be the real citizens. They will be voting each other in office. We will be voting non-persons. So one more day is too long. So it's not going to make any difference.

MS. WOODRUFF: Mr. Christie.

MR. CHRISTIE: I really think that to suggest that this fundamental transformation in South Africa is in effect meaningless, because this is what Mr. Kumalo says, is simply being -- ignoring reality. It is unrealistic. I think that -- well, I ask the question when are people going to realize that the sanctions are punishing not the current government, they're punishing or rewarding, the lifting of sanctions, are rewarding the next government, because what happens now, the investment, the extra investment that will either take place from foreign investors or from South African investors will come through in two to three or four years time.

MS. WOODRUFF: Down the road. You're saying the next --

MR. CHRISTIE: Down the road.

MS. WOODRUFF: -- government.

MR. CHRISTIE: In other words, any sanctions that are left in place now are punishing the next government, they're punishing the people of the country.

MS. WOODRUFF: Mr. Kumalo.

MR. KUMALO: Well, if I was the government or a businessman, I would say, yes, give us more time. The fact is that apartheid is punishing us right now. The absence of bad laws doesn't equal justice.

MS. WOODRUFF: I want to come back to you, Ms. Holtzman, on the point that Mr. Archey made, that he disagrees with you and he thinks that states and cities will, many of them, will change their minds and agree to lift those.

MS. HOLTZMAN: Well, some may without the advent of true democracy, but to get to the point about why sanctions were imposed to begin with, sanctions were imposed by New York City, the policy of disinvestment was made by the New York City Pension Fund, because of the, one, the injustice in South Africa, and two, because from the point of view of the pension funds, when you have profound injustice, you don't have the kind of political stability that is conducive to appropriate long-term investment. And the political conditions, until they change, the conditions of long- term investment in South Africa are not conducive for those investments. I believe that we, that cities like New York will not change their policy and the commitment to justice, and the commitment to political freedom is deep.

MS. WOODRUFF: Mr. Archey.

MR. ARCHEY: I'd like to add there is something that has been left out of this. All sanctions have not been removed. There are still restrictions, total restrictions, on Ex-Im Bank funding for South Africa by the federal government because that was under a different act. The United States still cannot vote favorably in the IMF, the International Monetary Fund --

MS. WOODRUFF: And how much a difference will any of that make?

MR. ARCHEY: Those are fairly significant at this point in time and what I am saying is those too can be phased out over time and what I'm getting at though is that I think we're at a point in time where I think the President has complied with congressional wishes and I think we're now at a point in time where we may be able to help this country economically get through a very tough period of time.

MS. WOODRUFF: Well, on that note we are going to have to leave it there. We want to thank you all for being with us, Mr. Christie, Mr. Archey here in Washington, Mr. Kumalo, Ms. Holtzman, thank you all. FOCUS - GENE MARKER

MR. MacNeil: Finally tonight one of the most ambitious medical projects in history, the mapping of all human genes, and charges that some of its discoveries could be used unfairly by insurance companies. Spencer Michels of public station KQED-San Francisco reports.

MR. MICHELS: In the vineyards of California's Napa Valley, genetic researchers came across this family, Katherine Caron and her mother, aunt, sisters, and children. An unusual hereditary form of breast cancer has plagued family members for generations. Thirty-two year old Katherine has had both breasts removed and reconstructed. Others have had ovarian cancer. Katherine's children and other relatives may be at risk though no conclusive tests are yet available.

KATHERINE CARON: I think I always suspected that something was not right but when I got breast cancer it was like all the evidence I needed because I knew that in my mom's generation there was cancer, I knew in the prior generation there was cancer, and in my generation there was not cancer at 31.

MR. MICHELS: Katherine's family has become part of a study aimed at discovering the gene that causes breast cancer, a study taking place in the laboratory of molecular biologist Mary-Claire King at the University of California at Berkeley.

DR. MARY-CLAIRE KING, Genetics Researcher: We're trying to identify what the genes are that have been altered in this family and are passed in altered form from generation to generation. Once those abnormal cells are detected in principle, diagnostic tools can be developed that will allow the removal of breast cells at a very, very early stage, without any sort of major surgery being required at all. Now that's a pipe dream but it's a pipe dream that I fully expect to see realized in my lifetime.

MR. MICHELS: King's research, a painstaking process using blood and tissue samples from many families with inherited breast cancer has already begun to pay off. A major breakthrough came last October.

DR. KING: What we found back in the fall was the locale on one of the human chromosomes of a gene that's responsible for inherited breast cancer in a large fraction of families where the disease occurs in young women. What we'll be able to do now using the vast physical and information resources from the Genome Project is to be able to close in on this gene.

MR. MICHELS: The Human Genome Project is a nationwide effort by molecular biologists to find and identify the fifty to one hundred thousand genes that determine human characteristics. The project is expected to take 15 years and cost $3 billion of federal money. The Lawrence Berkeley Lab on the University of California campus is one of many sites doing the basic research known as gene mapping. The results can eventually be used by scientists working on specific diseases. Sylvia Spengler, associate director of the Genome Project in Berkeley, says the potential goes beyond disease identification.

DR. SYLVIA SPENGLER, Genome Project Supervisor: It will begin to understand how cell development occurs, how organism development occurs, what are the things that turn a fertilized egg into a human being, how the connections are made, how intelligence develops, our personality develops, how to fix things when they go wrong.

MR. MICHELS: For Katherine Caron's family, things have gone wrong for generations.

MS. CARON: This is me and my sister, Annette.

MR. MICHELS: Before she developed cancer, Katherine was advised by her doctors to have a prophylactic mastectomy to remove a breast before it became cancerous. Her insurance carrier at first refused to pay for the operation.

MS. CARON: They said, no way, we're not paying for this, absolutely not. When I asked the insurance company and gave them the full history and basically told them I could provide records from my family and that my surgeon would back me on this, the prophylactic procedure was not uncalled for in this situation, they said they weren't willing to pay for it.

MR. MICHELS: Before she had the chance to have the preventive surgery, Katherine was diagnosed with breast cancer. The insurance company reversed its decision. Insurance companies are at the center of growing concern over the use of genetic information. As the Human Genome Project identifies more and more disease producing genes, critics fear that insurance carriers will screen out applicants based on their genetic predisposition toward a disease. Sixteen year old Ganesh Polit of Oakland, California, suffers from Fragile X Syndrome, a genetic disease that results in severe mental retardation. Ganesh makes friends easily, despite his poor speech and under developed motor skills. Doctors say that he is in good physical health and likely to remain so. But recently when his father, Mark Polit, went into business for himself and applied for new health insurance, Blue Cross advised the family it would not cover Ganesh for any illness based on his Fragile X diagnosis.

MARK POLIT: Since my son was no special medical risk, I was concerned that they deny insurance simply because he's disabled, however, in our society, we have sort of basic values that it's not fair to have a certain group of people suffer just because they have a hereditary trait.

MR. MICHELS: For six months, Mark Polit fought the bureaucracy at Blue Cross to get insurance for Ganesh. Blue Cross claims Fragile X was not the problem. It had great difficulty obtaining accurate health reports on Ganesh. After dozens of letters and phone calls, the carrier eventually relented and provided coverage. The rest of the Polit family had little trouble getting insurance. But in other cases, one bad gene has led to rejection for a whole family. In rural Wisconsin, 12 year old Michael Thorp has Turret's Syndrome, a genetic neurological disorder characterized by vocal outbursts and physical ticks. Michael's case is now in remission. Because there is no test for the Turret's gene, the insurance company didn't want to take a chance covering other family members who might still develop the Turret's disease.

GLORIA THORP: First of all I couldn't believe that they would turn down a whole family because of one, because one person had something. The only pre-existing condition that was on the application was the Turret that my son had and to turn all of us down because of that was, first of all, totally outrageous.

MR. MICHELS: The Thorp family finally did get coverage, but the insurance company offered only a limited six month policy to Michael. Steve Young is spokesman for the Health Insurance Association of America and the American Council of Life Insurance. he talked to reporter Stuart Schere in New York.

STEVE YOUNG, Insurance Industry Spokesman: The insurance industry is in the business of writing policies. It is not in the business of refusing policies. To my knowledge, no company orders genetic testing as a basis of its risk assessment procedure. However, if for some reason, someone else ordered a genetic test on an applicant, the insurance companies have a responsibility to their existing policy owners to take that into account.

MR. MICHELS: Dr. Paul Billings, chief of genetic medicine at Pacific Presbyterian Medical Center in San Francisco, says keeping genetic information private comes first.

DR. PAUL BILLINGS, Genetics Specialist: I think it's quite clear that there are people being hurt by the genetic revolution currently, and I think that we ought to have the restraints in place before we have the data banks, before we have a large number of people excluded from entitlements.

MR. MICHELS: Dr. Billings has taken his concerns to the California legislature. Assemblyman Lloyd Connelly has introduced legislation Billings helped him write. It would make genetic discrimination a violation of a person's civil rights.

LLOYD CONNELLY, California Assembly: The bill very simply says that we can't discriminate against people because they have some genetic propensity to develop a disease or disorder later in their life. They're going to be able to take a sample from your child, maybe even in the uterus, and be able to say now this child has a high propensity for early heart disease, we've got a problem here of a likelihood of Huntington's Disease or some other element, and that goes into that medical file for that child and follows him all through his life.

MR. MICHELS: Connelly and Billings fear that labs where human blood and tissue samples are stored would have the ability to compile genetic profiles of millions of Americans, information that insurance companies might some day get their hands on.

DR. MARY-CLAIRE KING: I don't want an insurance company or anybody else finding out whether I carry a Tay Sachs gene or whether I carry a Cystic Fibrosis gene. That's nobody's business but mine. I don't want an insurance company ever able to find out whether I carry a gene for Alzheimer's Disease and whether at the age of 65 I may become an enormous burden to society because I have Alzheimer's. I want my insurance to be available to me because of the kind of life I lead now.

MR. MICHELS: The insurance spokesman says such concerns are overblown and genetic information is of little consequence to the industry.

STEVE YOUNG, Insurance Industry Spokesman: It's simply not an important factor in the overall and is not likely to become an important factor. Genetic testing is so expensive to do that insurance companies are not likely to be interested in it because it would cost so much money to test any significant universe of people.

MR. MICHELS: Some Genome Project scientists fear that the debate over insurance and privacy could slow the pace of research.

DR. SYLVIA SPENGLER: There are people who would like I think to stop the science until their ethical and social concerns have some sort of legal background. I am opposed to that. If we delay the science, we delay the identification of the gene, we delay the kind of treatment that can be developed for a gene. You just push off everything that much further.

MR. MICHELS: The Genome Project has allocated 3 percent of its budget to study the ethical and social issues. The families suffering from genetic disease are involved too. They want research to proceed quickly but they also worry that their rights to privacy and health insurance could get lost in the aggressive pursuit of revolutionary science.

MR. MacNeil: A bill now before Congress would make it a federal crime to divulge genetic information without consent. Misuse of genetic information would be punishable by a fine and up to 18 months in prison. RECAP

MS. WOODRUFF: Again the major stories of this Wednesday, President Bush announced that the United States would end five years of economic sanctions against South Africa and the President reappointed Alan Greenspan to another four year term as chairman of the Federal Reserve Board. Good night, Robin.

MR. MacNeil: Good night, Judy. That's the NewsHour for tonight. Join us tomorrow night for a report on the NAACP convention's reaction to the Clarence Thomas Supreme Court nomination. I'm Robert MacNeil. Good night.